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Dec 10

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DOJ & SEC Issue Guidance on Foreign Corrupt Practice Act

The U.S. Justice Department (DOJ) and Securities and Exchange Commission (SEC) jointly published a much anticipated guidance on the U.S. Foreign Corrupt Practices Act (FCPA). Entitled “A Resource Guide to the U.S. Foreign Corrupt Practices Act”, the “Guide” is 120 pages long, and is significantly more comprehensive than its predecessor, the “Lay Person’s Guide to the FCPA”.

The new Guide provides no major surprises and is non-binding. In some cases, the guidance is not established law, but the government’s view based on its positions and what the government has been able to extract in prior settlements. Nevertheless, the book is useful because it accumulates in one place the DOJ’s and SEC’s frequent FCPA positions, and provides practitioners with guidance regarding these positions.

Perhaps the most unique part of the Guide is six recent anonymous examples where the DOJ and SEC declined to take enforcement action. The six examples had the following items in common:

  1. The bribes and related benefit of the wrongful conduct were relatively small;
  2. The company self-reported to the government;
  3. The company provided the results of its investigation to the government;
  4. The company took remedial action in terms of control and training improvements; and
  5. The company took strong disciplinary action (generally termination) against those involved in the wrongful conduct.

While the government wishes to claim that the cooperating self-reporters are treated better, this is not always the case. Legal and forensic accounting expertise should be sought throughout the process of investigating the scope of wrongful conduct and determining how to resolve the complex related challenges.

This article provides additional details about the Guide and the FCPA.

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2012/12/doj-sec-issue-guidance-on-foreign-corrupt-practice-act/

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